How Much Money Can You Make by Owning a Daycare?

by Rick Suttle

Daycare owners' earnings are proportional to the number of children they watch.

Daycare owners usually stay extremely busy, preparing meals and educational activities for children and ensuring they get enough exercise. They also maintain records of children's routines and report their progress and interests to parents. If you can picture yourself kneeling, lifting and working amid a group of noisy youngsters, daycare owner may be the perfect job for you. You'll also need to hire and train daycare workers if you operate from a commercial building -- and maintain records of your sales and expenses. You can expect to earn an annual salary averaging nearly $40,000.

Salary and Qualifications

Daycare owners usually pay their salaries from their profits. They earned average annual salaries of $37,000 as of 2013, according to the job site Simply Hired. To become a daycare owner, you need at least a high school diploma. You will need a license in most states and be required to pass a background check. Some states may also require you to have postsecondary education in childcare services, such as an associate's degree. Childcare workers, including daycare owners, may also need to get certified through educational programs offered by the Council for Professional Recognition or the National Early Childhood Program Accreditation, according to the U.S. Bureau of Labor Statistics. Other essential qualifications include patience and physical stamina and communication, instructional and people skills.

Regional Salaries

In 2013, average salaries for daycare owners varied the most within the South region, according to Simply Hired, where they earned the lowest salaries of $29,000 in Mississippi and highest of $58,000 in Washington, D.C. Those in the Midwest made $29,000 to $39,000 per year in South Dakota and Minnesota, respectively. If you owned a daycare in Maine or Massachusetts, you'd earn $33,000 or $45,000, respectively, which represented the lowest and highest earnings in the Northeast. In the West, you'd make the most in California and least in Montana -- $42,000 and $29,000, respectively.

Contributing Factors

Your income as a daycare owner is contingent on the number of children you have enrolled at your daycare location or home. You would earn more if you worked with 12 kids versus eight, for example. You may also draw a larger client base in a more densely populated city. Daycare owners earn more in Massachusetts and Washington, D.C., because living costs are higher there. This usually enables them to charge more for their services, as long as their rates remain competitive. If you earned $35,000 as a daycare owner in Pierre, S.D., you'd need to make $48,433 in Boston to maintain your living standard, according to CNN Money's "Cost of Living" calculator. In Washington, D.C., you'd need to make $49,564 for the same reason, or approximately 42 percent more.

Job Outlook

The BLS projects a 20 percent increase in employment for childcare workers through 2020, which is faster than the 14 percent growth rate for all occupations. Job opportunities for childcare workers and daycare owners should remain strong as working parents continue to rely on their services. Childcare has been highly recognized in the 21st century as essential for childrens' social and educational development.